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10 Must Reads for the CRE Industry Today (May 3, 2018)

The Federal Reserve kept the interest rate flat in May, reports the Wall Street Journal. Amazon has put the breaks on its expansion plan in Seattle due to a possible new city tax, according to The New York Times. These are among today’s must reads from around the commercial real estate industry.

Fed Holds Rates Steady, but Indicates Increases Will Continue “The Federal Reserve held short-term interest rates steady Wednesday and indicated it remains on track to raise them gradually in coming months to keep the expanding economy on an even keel. The Fed, in a statement released after its two-day policy meeting, offered nothing to dispel market expectations that it would deliver its second rate increase of the year when it meets in June.” (Wall Street Journal, subscription required)

Amazon Pauses Huge Development Plans in Seattle Over Tax Plan “Amazon abruptly escalated a fight with its hometown on Wednesday, halting major expansion plans in Seattle because of a tax being considered by the City Council. The new tax would charge large employers in the city about $500 per employee, with the money going to help alleviate a housing crisis. The tax is squarely aimed at Amazon, which is Seattle’s largest employer and frequently blamed by many residents for the city’s soaring housing costs. The company said it would halt construction of a new building it was planning to erect downtown and reconsider occupying another that is already under construction, putting 7,000 or more jobs in jeopardy.” (The New York Times)

Juggling Real Estate Investments and a Full-Time Job “Last year, more than three-quarters of independent landlords in the U.S. told us they worked a full- or part-time job in addition to their work as a property owner. So if you own an investment property, there’s a pretty good chance you’re also working a day job. And because of that, there’s also a good chance you’ve run into trouble trying to get everything done. I’ve been there. I bought my first investment property while I was working in finance, and one of the things that struck me was how much time it took to manage the paperwork side of being a landlord.” (Forbes)

Congressmen Are Sleeping in Their Offices to Save Money: ‘I Can’t Afford an Apartment’ “These Congress members are sleeping on the job — and defending their right to do it. Crying poverty amid decade-long stagnant salaries and Washington’s steep cost of living, an increasing number of House lawmakers have turned into professional squatters at night, hitting the sack in their Capitol Hill offices — on everything from cots in closets to futons stashed behind constituent couches — to save a few bucks during the work week.” (MarketWatch)

Amazon Could Make Whole Foods Cheaper Than Most Grocery Stores “Amazon's plan to offer a 10% discount on Whole Foods items to Amazon Prime members is a ‘meaningful signal about AMZN's laser focus on taking share in the $800 billion US grocery industry,’ Morgan Stanley analyst Brian Nowak wrote in a note to clients out Wednesday. The 10% discount will also apply to "already discounted" items at Whole Foods stores, Nowak said. Amazon has already been slashing prices at Whole Foods as it continues its effort to transform perception from the high-end grocer it once was to the grocer-for-the-masses it may be in the midst of becoming.” (Business Insider)

Super Cooper: Kimco’s Scion on Family and Staying Lean in a Bloated Retail Atmosphere “As the grandson of Milton Cooper, the entrepreneur who founded an empire of open-air shopping centers in 1958, the younger Cooper grew up talking deals with the grownups. He was 8 in 1991 when his grandfather led Kimco through its initial public offering at a time when there was still widespread industry skepticism about the very notion of real estate investment trusts. The family proved those doubters wrong over the next 20 years, as the REIT, from its New Hyde Park, N.Y., headquarters on Long Island, expanded to own a vast portfolio of strip malls throughout the country.” (Commercial Observer)

Southgate Mall Officially Sold to Ohio-Based Real Estate Investment Trust for $58M “Southgate Mall in Missoula officially has been sold for $58 million to an Ohio-based real estate investment trust called Washington Prime Group Inc. It’s expected to be one of the largest mall sales in the Pacific Northwest this year, according to the firm that brokered the deal. The mall was built starting in 1978. The 44-acre property includes a new nine-screen dine-in AMC Theater, a new Lucky’s Market grocery store and dozens of other large retail tenants.” (Missoulian)

Macy’s Acquires NYC Retailer Story, Makes its Founder Brand Experience Officer “Macy's Inc. M, -0.03% said Wednesday that it has acquired Story, a New York City retailer that changes the store design and merchandise every four-to-eight weeks. Located in the Chelsea section of Manhattan, Story is currently also operating as a work space, according to the store's website. Story's founder Rachel Shechtman has been named Macy's brand experience officer, focusing on in-store experience. Story will continue as usual with rotating themes.” (MarketWatch)

Silverstein Raises $200M in Bonds in Tel Aviv “Larry Silverstein’s Silverstein Properties tendered a $200 million bond offer on the Tel Aviv Stock Exchange on Tuesday — its first on the Israeli market — and raised the full amount, at a 3.38 percent interest rate. The developer’s offer was oversubscribed by nearly triple the asking amount, receiving $592 million in bids from investors, according to documents filed with the stock exchange. Silverstein accepted $174 million in the institutional tender, with the remaining $26 million open to private investors.” (The Real Deal)

Petco and PetSmart Beware: Amazon Is Muscling Into Pet Products with its Own Brand “Amazon has started its own brand of pet products, called Wag, expanding on existing private-label efforts that include batteries, baby products, clothing and household goods. The Wag brand launched Wednesday with dry dog food and Amazon plans to expand the selection to include other pet supplies. The brand is available only to Amazon Prime subscribers, who pay monthly or annual fees in exchange for fast delivery as well as video and music streaming.” (Fortune)